Under the 1946 Act, the Labour Court could register employment agreements entered into between trade unions and employers in sectors/groups relating to remuneration and terms of employment, known as REAs. Once it was registered, it was legally binding not only on the parties to the REA but on others in the relevant industry/group whether or not they were party to the agreement or represented in relation to the REA. A breach of the REA was enforceable under civil and criminal law.

Ultimately, the Supreme Court held that delegating the making, variation and cancellation of REAs to the Labour Court was unconstitutional, because effectively it gave power to the Labour Court to make “any law they wish” which impacted all parties in the relevant sector or group, irrespective of whether they were party to the agreement.

Pursuant to Article 15.2.1 of the Constitution, the Oireachtas has the sole and exclusive power to make laws in the State. The Supreme Court held that once registered, an REA “passes unmistakably into the field of legislation which by Article 15 is the sole and exclusive preserve of the Oireachtas.” Thus, REAs were held to be unconstitutional.

For further information see the attached link to the previous article on this topic Supreme Court Declares Registered Employment Agreements Unconstitutional — How Does This Impact on Your Business?

The re-introduction of REAs — the 2015 Act

The 2015 Act commenced on 1 August 2015 and creates a new framework for the registration of employment agreements with a view to re-introducing REAs in a constitutionally robust manner.

The 2015 Act sets out the steps that must be followed to register an REA. REAs registered under the 2015 Act will be legally binding only on the parties to the agreement, as specified in the agreement, in respect of workers of that class, type or group referred to in the agreement.

As part of the registration of REAs under the 2015 Act, those seeking to register the REA will be required to provide such confirmation as the Labour Court may specify, that the applicants are “substantially representative” of the workers in the class, type or group to which the agreement is expressed to provide.

While the term “substantially representative” is not defined in the 2015 Act, Section 8(c) provides that the Labour Court should take into consideration the number of workers represented by the trade union(s) specified in the agreement that are employed by the employer(s) specified in the agreement.

Prior to registering the REA, the legislation sets out that the Labour Court must be satisfied of a number of factors, including that it should be satisfied that the registration of the agreement is likely to promote harmonious relations between the workers concerned and their employers and that it will avoid industrial unrest.

The 2015 Act also sets out how an REA can be varied or cancelled by the parties once registered. For example, the Labour Court may cancel the REA if it is satisfied that the trade union who was a party to the agreement is no longer substantially representative of the workers concerned.

For further information on this article or any employment law queries, please contact Laura Graham at lgraham@reddycharlton.ie